Jim Beckley ● January 23, 2020
Most homeowners have visited the Zillow website at some point to check their Zestimate value. Some are pleasantly surprised, while others are offended at the low price assigned to their beloved home. Zillow, and many other realtor websites, have been providing real estate valuations for years. So what goes into these property estimates and how much value should we be placing on the provided information?
First, let’s acknowledge that Zillow is a popular, user-friendly tool for homeowners, sellers, and buyers to discover home values across the nation.
Curious how much a single family home sells for in Beverly Hills?
Simply punch in a zip code and zoom in on their interactive map.
Thinking of relocating closer to family in the Midwest?
Enter the street name of your in-laws and voila!
Property estimates at the click of a button.
In this digital age, access to information is key to gaining clicks and popularity online.
The more popular you are online, the more accepted the data on your website becomes. Perception quickly becomes reality in many cases.
Accurate or not, home buyers use these automated valuations as a barometer to the true value of a house.
Should buyers and sellers rely on the Zestimate when buying/selling real estate?
The price assigned to a property is based on a series of mathematical algorithms that are proprietary to each realty website. We can assume that they are using publicly available data tied to the property, such as when the home was built, square footage, bedrooms, bathrooms and acreage. Additionally, they’ll factor in recent local home sales, along with national and local real estate trends and forecasts. These are all good starting points for determining the value of a property.
However, when my clients reference a computer-generated valuation for a property we’re discussing, I’ll ask them, “When was the last time someone from Zillow knocked on your door and toured your home?” For example, what if the public record is inaccurate and doesn’t account for the 300 square foot addition completed 5 years ago? What about the finished basement that was completed in the last renovation? Was a bedroom or bath added in the process? What about the deck or $50,000 stone patio that was added? One infamous example of the inaccuracy of a Zestimate was in 2016 when former Zillow CEO Spencer Rascoff’s Seattle home sold for $1.05M — 40% less than the Zillow estimate of $1.75M. This prompted Zillow to say that their Zestimates can be a good conversation starter for pricing a home, but not the final word on its value — a claim of which experienced Realtors were already certain.
Tales like this bring us back to the importance of working with a licensed Realtor who can guide you through the home buying/selling process. An experienced local Realtor will have more detailed knowledge of a home’s value relative to others on the market.
If you or anyone you know are interested in seeing what your home could sell for in the current marketplace, give me a call. I’d be glad to provide a no-obligation home assessment to point you in the right direction.